Sure. Usually if you give embarrassing people the runaround, they eventually go away. It was, admittedly, way too optimistic for the government to assume ever

Sure. Usually if you give embarrassing people the runaround, they eventually go away. It was, admittedly, way too optimistic for the government to assume every seized domain would work this way. But for them to assume this one specific one would work that way is actually depressingly likely. Governments illegally seize stuff all the time, especially when investigating anything drug-related. They can seize and auction off your stuff basically even on suspicion of it being bought with drug money. What happens if it wasn't? Well, they owe you money back if your lawyer is good enough to make that happen.